The United States announced Thursday a new set of economic sanctions against Iran targeted to impact the country's military and halt Tehran's disputed nuclear program. A State Department official and a U.S. senator offer perspectives on the U.S. policy course on Iran.

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JIM LEHRER:

Now, the Iran sanctions story, and to Judy Woodruff.

JUDY WOODRUFF:

The new U.S. sanctions announced this morning are the first ever aimed at the military of a foreign country. They are directed against Iran's Revolutionary Guards, the Ministry of Defense and Logistics Agency, as well as against three major Iranian state-owned banks and eight individuals.

For more on the sanctions and what they're meant to accomplish, we're joined by Undersecretary of State Nicholas Burns.

Secretary Burns, thank you for being with us. First of all, tell us, what are these sanctions designed to do?

NICHOLAS BURNS, U.S. Undersecretary of State: The sanctions are designed to focus on two big problem areas. The first is that Iran is seeking a nuclear capability, this enrichment and reprocessing research that some people fear might lead to a nuclear weapons capability.

And part of the sanctions today are designed to make it difficult for Iranian government agencies to support ballistic missile research that would accompany a nuclear device and a nuclear program itself.

The other part of the sanctions, Judy, are focused on the Quds Force, which is an arm of the Iranian Revolutionary Guard's core command. And that's the organization that has been funneling arms to Hamas in Gaza, to Hezbollah in Lebanon, to the Shia militants in Iraq — and some of those weapons have been used to attack American soldiers — and to the Taliban in Afghanistan.

So Iran is aiding, and funding, and giving arms to all the Middle East terrorist groups that are opposed to the United States, and we felt, to defend our interests, we had to take this action to isolate these organizations.

JUDY WOODRUFF:

And why are you doing it right now?

NICHOLAS BURNS:

We're doing it now because we are trying to seek a diplomatic solution to this problem. We do not believe that a conflict with Iran is inevitable; it is certainly not desirable. We want to have a chance to get to negotiations.

And to do that, you've got to increase the cost to the Iranian government of its present behavior and hope that we'll soon see a third Security Council sanctions resolution and we might see other countries, most principally the European Union, take sanctions actions of their own so that the Iranians understand they're increasingly isolated and alone in the world because of their policies.

JUDY WOODRUFF:

Well, you're sanctioning both the Revolutionary Guards, the Quds Force, as you just mentioned, and these banks and individuals. What's the connection here?

NICHOLAS BURNS:

The connection is that three major Iranian banks, the three major Iranian banks, which were sanctioned today by the Treasury Department, are all involved either in the financing of terrorism or the financing that goes into the nuclear program.

And, of course, what we're trying to do to avoid the use of military force, which we want to do at all costs, is to try to dry up the ability of these financial institutions to extend capital to the agencies that are organizing both the terrorist apparatus, but also the nuclear program inside Iran.

JUDY WOODRUFF:

So you're trying to put the banks out of business?

NICHOLAS BURNS:

Well, I think the reputational risk for the Iranian firms now is that they're completely cut off to the U.S. financial system. That will have repercussions in the Arab world; it will have repercussions in Europe. It's going to be much more difficult for these banks to exist.

I'll give you an example. The Security Council sanctioned an Iranian bank, Bank Sepah, back in March. And Bank Sepah has had a very difficult time doing business all over the world, because all of the nations of the world are imposing sanctions on it.

So these kind of financial sanctions can be very effective, and they don't — we don't mean them just to be punitive. There is an end result here. We've actually offered negotiations to the Iranians three times over the last year-and-a-half.

We, the Russians, the Chinese, and the Europeans, together have said, "Meet us at the negotiating table. Let's see if you could suspend your nuclear research, and let's see if we can help to provide for civil nuclear power for electricity production for the Iranian people."

But we don't want to give them — and we will not give them — assistance, obviously, towards a nuclear capability. And Iran has turned down those negotiations. We'd like to make sure the Iranian government knows how isolated it is, and hopefully they'll reconsider this refusal to negotiate.

JUDY WOODRUFF:

But why not give them more time to reconsider?

NICHOLAS BURNS:

Well, we've given them a lot of time, Judy. The first offer was made on June 1, 2006. That was a year-and-a-half ago. We've reissued the offer in June of 2007 and just a couple of weeks ago.

In fact, Javier Solana, the E.U. foreign policy chief, met in Rome on Tuesday with Iranian officials and said the United States wants to negotiate. Secretary Condoleezza Rice she said she would be at those negotiations and that would be the first such meeting since before the Iranian Revolution of 1979.

So the Iranian government seems to be in a mindset where they want to race ahead with the nuclear program, and they're continuing to support the terrorist groups. And obviously we have got to do something to try to stop them, and that something is diplomacy and sanctions together.